Enough

By John C. Bogle

Review by Steve and Dan

The author explains and addresses, head-on, the many problems with the financial industry’s relationship to regular investors. We have read several of John Bogle’s other investment books and adapted his indexing strategy. “Enough” provides an understanding of Bogle’s life and his business philosophy behind his creation of the legendary Vanguard Mutual Fund Group. After reading this book, readers who may not be familiar with Mr. Bogle or his investment company he built, will better understand why millions of investors now use Vanguard.

Jack Bogle, the father of indexing

Many investors are grateful what this giant man has done to make the financial industry more accountable to us working stiffs. Vanguard must be doing something right. The philosophy voiced in Enough resonates with 20+ million people who have invested over $3 trillion in assets. It is the largest and most respected mutual fund company in the world committed to the average investor with its low costs and indexing strategy. Our positive spin on this book, Mr. Bogle and his investment company reflect these earth-shattering numbers that speak for themselves.

We (Dan and Steve) have been suspicious of stock trading and think most investors prefer a balanced plan too. We want our investments to grow without tedious “tinkering” so we can go about our business. Because Vanguard investors do not trade frequently, the “buy and hold” may have stabilized some of the trading frenzy that contributes to the unhealthy swings in the stock market. Think about another set of numbers–Vanguard and TIAA-CREF have over $4 trillion in investment assets. TIAA-CREF has the same investment philosophy as Vanguard–low costs, low turnover, no commissions charged. Four trillion dollars are beyond Wall Street’s big banks and brokerage houses greedy trading fingers and their speculative mindset. Wall Street’s broker/dealers trade their client’s stocks unabashedly to generate lucrative commissions for themselves and their shareholders, not for their clients.

Our attraction extends beyond low costs (which we love) to the heart of Bogle’s investing philosophy. In Chapter 2: “Too Much Speculation, Not Enough Investment” he explains our shared philosophies. We want to just enough equity risk to meet or beat the inflation rate, not speculation and excessive trading, and not overly “safe” annuities which will never meet or beat the inflation rate. Annuities are not investments (They are NOTHING, but contracts with an insurance company, another mistake getting sold 5 costly fixed 403(b) TSA annuities with hefty commissions to the insurance we were young educators!).

Bogle addresses trust in two chapters “Too Much Counting, Not Enough Trust.” Because of our negative experience with costly annuities and the insurance agents who sell them, we (both of us are educators) had to find our way early on. 403(b) plans with K-12 school districts have massive conflicts of interests insurance agents, their retirement planning costs, commissions, duplicate insurance coverage with dismal annuity returns. We could not trust any financial professional with our money!

In the second chapter about trust, Bogle’s Chapter 5, “Too Much Business Conduct, Not Enough Professional Conduct” describes our negative experiences with Wall Street. Its sole purpose in “business conduct” is to make a profit. In contrast, Vanguard 100% “Professional Conduct,” means that the client is the master, in which they look out for the client’s best interest. The main reason why Wall Street would like to minimize this Bogle’s influence is that Wall Street’s excessive bonuses and shareholders are their incentives.

Bogle said one part of the financial industry that you can trust is that the fine people working in the world’s corporate culture will grow over time. But never trust any one person’s prediction or a narrow sector of the stocks to “beat the averages.” Many academic studies report that typical financial professionals may get a prediction correct a few times, with investors making huge gains, but it is almost always short-term. Over time the market average returns for the major indices beat the narrow choices.

After the tech bubble disaster when we lost over a million in our personal portfolio, we found Bogle. His philosophy fits right where we wanted to be, not too “exciting” and not too painful, build wealth slowly over time. We learned there is nothing wrong with earning average index returns, reducing investment costs and choosing Bogle’s “Age-in-Bond” rule. By the end of 2008, our portfolio only lost 11.8%, thanks to his Age-in-Bond rule and rebalancing (Age in Bond rule: a 60-year-old should allocate 60% of their diversified portfolio in bonds, and 40% in equities). Our 30% equity/70% bond portfolio has continued growing in the last 6 years regaining what we lost from the 2000-2002 technology crash.

Since 2009, we have saved so much in our “couch potato” portfolio costs, we could afford the car of our dreams, the all-electric Tesla. And to create energy, we invested in 24 solar panels on our house which produces the home and transportation energy we need. We met our green goal and saving over $5000 each year in energy costs.

For the above reasons the author’s life philosophy in “Enough” is no surprise. We found it so refreshing that we read it twice to relearn and absorb all of his wisdoms. Bogle shows how people can be content and satisfied with their lives as reflected by many of the philosophers Bogle cited and woven into his philosophy of living. This interesting combination of “Money, Business and Life” is a refreshing read. It’s not just about money, it’s how we conduct ourselves as compassionate human beings. Most of us want lives that are uncomplicated, low stress as we work hard to make our unique contributions to society.

Many studies on happiness have found that just having a lot of money, vacation homes, yachts, and power over others do not guarantee a content and satisfying life. Most of us over 50 remember that Americans used to have frugal values (Bogle calls it thriftiness). People did not need more than one bathroom, the new and expensive gas-guzzler every three years or the related unhealthy materialistic stress of “keeping up with the Jones.” In the last 35 years, practical frugality has subtly morphed into an unhealthy “success” by borrowing and spending. The disconnect between seeking happiness by purchase of an improved presentation to others is woefully ignored. The temptation to spend is powerful. We keep trying to put this square peg into a round hole.

Bogle will have none of it. In fact, he wrote an entire chapter on how our culture has misinterpreted the mean of “success.” In his “Too Much “Success,” Not Enough Character,” chapter, he wrote, “Success cannot be measured solely… in monetary terms, nor in terms…of power…over others. But it can be measured in our contributions to building a better world, in helping our fellow man, and in raising children who themselves become loving human beings and good citizens. Success…can be measured not in what we attain for ourselves, but in what we contribute to our society.” I think Mr. Bogle is pleased with Bill Gates, founder of Microsoft and Warren Buffett, the world’s most successful investor, for donating their billions back to society through the Bill and Melinda Gates Foundation.

John Bogle never forgot where he came from and who he is, and what Americans can do to reject the stressful, complicated and unfrugal ways we find ourselves in the 21st century.

As a couple of ordinary investors, my spouse and I are extremely fortunate for two reasons:

1. Bogle’s remarkable contributions in our lifetime,

2. Our wherewithal to have found this great man that matches our life philosophy and to have learned his investment strategy so much so we manage our investments without a cost financial adviser.

Stephen A. Schullo, Ph.D. (UCLA ’96) taught in the Los Angeles Unified School District (LAUSD) for 24 years and UCLA Extension retired in 2008. The first generation Italian-American, ex-Marine, Vietnam veteran wrote investment articles for United Teachers-Los Angeles’ union newspaper (circ. 40,000) for 11 years. A thrice-featured volunteer retirement plan advocate, twice in the Los Angeles Times and once in U.S. News and World Report. Steve and his late husband, Dan were featured on the national broadcast PBS Frontline: The Retirement Gamble. He started an investor self-help group with Sandy Keaton for LAUSD colleagues and wrote 6,500 posts in three investment forums since 1997. Frequently quoted and interviewed by the media, testified at state legislative hearings, and honored with the “Unsung Hero” by the 40,000 member Los Angeles teachers’ union for his retirement investing advocacy.

After 11 years, Steve still serves on LAUSD’s Investment Advisory Committee as Member-at-Large and former co-chair. The committee oversees 457(b)/403(b) plans for 55,000 former and current LAUSD employees, assets of $2.4 billion.

He has self-published two personal finance books: Late Bloomer Millionaires, and Fighting Powerful Interests.

Dan Robertson, Ph.D. (UCLA,’78; 1941-2015), Director of the Employment and Training Center for Persons with Disabilities at California State University, Los Angeles, taught Special Education for twenty-eight years: children (Associated Clinics) and graduate students. He wrote grants, created budgets, maintained financial oversight and operated job training programs ($3.5M). Dan has twenty-five years of reflection, study and investing experience. With Steve, he was featured in the Los Angeles Times Money Makeover feature. Implemented a low-cost 403b plan at the Van Ness House, a GLBTQ recovery center located in Hollywood. Retired in 2000.

Steve and Dan were married and have been together for 40 years, until Dan’s sudden and shocking death from acute monoblastic leukemia in 2015.

About

Steve Schullo is a retired Los Angeles Unified School District elementary teacher. Because of his negative experiences with financial professionals and their terrible and costly retirement products, he has been and is still a 403(b) reform advocate and author of two books. Steve is not a licensed finan­cial or invest­ment advi­sor, and the infor­ma­tion and expe­riences shared as a do-it-yourself investor con­tained herein is for infor­ma­tional pur­poses only and does not con­sti­tute finan­cial advice.

Through­out my blog, I share my expe­ri­ences with finances as an ordi­nary con­sumer. I am NOT a financial pro­fes­sion­al.
Do not start, change or mod­ify your port­fo­lio based on the infor­ma­tion in this blog alone. Any ideas, invest­ment strate­gies, links to fee-only pro­fes­sional advis­ers and par­tic­u­lar invest­ment com­pa­nies dis­cussed in any arti­cle or in my blog are a reflec­tion of my expe­ri­ences and should not be con­strued as a rec­om­men­da­tion. Always con­sult with a tax or finan­cial professional.